Russia seems to be loosening its stance on regulating the cryptocurrency market. Lawmakers in the country have approved a draft law that could exempt digital asset issuers from making value-added tax payments.
Russia exempts digital asset issuers from value-added tax
According to Reuters, the draft law was approved after second and third readings at State Duma, Russia’s federal assembly. This law will exempt digital asset issuers from value-added tax. The exemption will also apply to “information systems operators” that aid in issuing these tokens.
Value-added taxes are imposed on goods depending on the value attained in every production stage. The Inter-American Centre of Tax Administrations said that hardly any country had imposed the VAT tax on the exchange of virtual currencies by the end of 2020.
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The current income tax payment rate in Russia sits at 20%. This rate applies to all standard assets. Under this new law, the tax will be reduced to around 13% of companies in Russia and 15% of the other companies. The law must be approved by the upper house and Russian President Vladimir Putin for it to become law.
Crypto regulations in Russia
Russia’s central bank proposed a ban on cryptocurrencies in January this year. The institution said cryptocurrencies were like “pyramid schemes” threatening the sovereign monetary policy. However, the ban was rejected by the Ministry of Finance, which advocates for regulation.
Russian lawmakers also recently finalized the first reading on a bill that would ban digital assets used for payments. The central bank also said Russia could start accepting Bitcoin for international payments.
Russia has faced numerous sanctions imposed by Western countries. Russia was removed from the SWIFT banking system. This move saw $600 billion of the country’s foreign reserves held by Western countries. Some of the popular investors in the crypto space argued that Russia sanctions would be bullish for the crypto market. However, Bitcoin has faced a notable recession, with the prices falling below $20,000.
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